Michael Lloyd/The OregonianWearing a chef's jacket embroidered with a momento of his past, Tom Hurley working at his Northwest Portland restaurant. He has since closed the restaurant and moved to California. An arbitrator's ruling that grants Portland firefighter-turned-chef Tom Hurley more than $100,000 in disability payments that were cut off when he refused to return to a light-duty job threatens to unravel the 2006 reforms voters approved to curtail abuses in Portland's unique public safety disability fund.

The ruling grants Hurley three years of lost disability payments and $3,200 in continued monthly benefits -- a decision that could open the door for other injured firefighters and police to challenge the city's return-to-work program.

Portland Fire Commissioner Randy Leonard said Tuesday that he has accepted the arbitrator's ruling, a move that angered Police Commissioner Dan Saltzman. Saltzman said Leonard's actions will set a dangerous precedent and hamper the city's ability to fight other pending grievances and civil lawsuits.

"We should be challenging on all fronts individuals that milked the system," Saltzman said. "This is the poster child for the 2006 reforms to the disability system. He's thumbed his nose at returning to work virtually his whole career. I think we should take on the Hurley issue on all fronts."

Hurley, a fifth-generation firefighter, hasn't fought a fire since at least 1993, after reporting two separate injuries to his knee and back. He received vocational rehabilitation training and was sent to the French Culinary Institute of New York in 2000. Tuition at the time was about $25,000.

The Oregonian published an investigation in 2005 that showed the city's system was an open checkbook with rules that allowed police and firefighters to collect disability checks until they retire, even if they could earn a living in another job.

Since going on disability, Hurley has worked in drywall and construction and has owned restaurants in Portland and Seattle. All along, the fund has continued to pay his disability benefits. After voters approved reforms in 2006, the fund started the "return-to-work" program and ordered Hurley to start training as a low-hazard fire inspector.

He refused, and the fund cut off his benefits and terminated him in 2007. He could have appealed through the fund's appeals process but didn't. Instead, the union filed a grievance against the city on his behalf.

Jim Forquer, a battalion chief and president of the Portland Fire Fighters Association, said the union isn't opposed to bringing injured workers back to work but had requested that the salaries, assignments and workload of the new jobs be part of bargaining and was refused the opportunity.

The arbitrator ruled that the city violated the collective bargaining contract by not negotiating the impact of the newly formed light-duty jobs for injured workers.

The city argued that the return-to-work program was a pilot program that equated to an "assignment of work" and was not subject to negotiations. The city further argued that it is prohibited from bargaining over matters under the control of the public safety fund, just as the state wouldn't bargain provisions of the Public Employees Retirement System or worker's compensation benefits.

While Leonard has the authority to accept the arbitration ruling, he's adamant that the money not come out of the Fire Bureau's budget.

"The Fire Bureau is not going to pay," Leonard said.

But that leaves open the question of who, then, will pay these costly benefits?

Leonard suggested it's the role of the public safety disability fund, which cut off Hurley's benefits.

But that's unlikely since Hurley's grievance was filed against the city and comes as the City Council is vigorously fighting similar union grievances and civil suits that are challenging the fund's reforms based on the same argument, that they were not part of contract negotiations.

The Portland Fire and Police Disability and Retirement Fund "is a separate system from the city. It's not the employer. This arbitration was against the city and its collective bargaining agreement," said Justin Delaney, a member of the disability fund's board of trustees. "FPDR is not party to the collective bargaining. We really have to keep the two separate."

The arbitrator in Hurley's case also specifically directed the "City (not the Fund)" to make up the disability benefits Hurley lost, meaning that the money would come from the city's general fund.

Either way, it's bound to fall to Portland taxpayers, whether it's from the public safety fund's levy or the city's general fund.

Leonard, a former firefighter and a former union president, argues that the arbitrator's decision is binding and that Hurley's case is an exception because he went through vocational training to start a new career and had been off duty for more than 13 years.

According to the city attorney's office, the city has two options when an arbitrator's ruling is handed down: Follow it or not. If the city doesn't, that typically prompts the union to file an unfair labor practice complaint and the matter ends up in court.